Sorry!! The article you are trying to read is not available now.

Stimulus Bond Program Has Unforeseen Costs

Print comment Post Comments
The Times this morning takes a closer look at Build America Bonds, a key part of President Obama's economic stimulus plan. The way it works:

"States and cities have embraced these taxable bonds to borrow money at what they assume are favorable interest rates. The federal government pays 35 percent of the interest costs on the bonds, a huge potential saving."

Fair enough. But, there are problems, of course. Otherwise it wouldn't be in the Times!

"For one, Wall Street banks are charging larger commissions for selling Build America Bonds than they do for normal municipal bonds, increasing the costs to the states and cities. or another, the new bonds may be priced too cheaply, enabling quick-footed investors to turn a fast profit as the prices climb, but raising interest costs for taxpayers."
SOURCE:   New York Times